On July 18, the UC Board of Regents voted to endorse Governor Jerry Brown’s tax initiative and enact a temporary tuition freeze for the 2012-2013 academic year. The meeting, located at UCSF Mission Bay, saw demonstrations from students dressed as “debt zombies” to protest the deadening effects of rising tuition, where it was soon declared an unlawful assembly. The regents also sought alternative revenue sources to offset the projected budget deficits.
The tuition freeze is contingent upon passage of Governor Brown’s Proposition 30, in which voters will decide to approve sales and income tax increases on Nov. 6. If the tax initiative fails, it will result in a $250 million mid-year “trigger cut,” leading to an expected rise of nearly $2,400 in annual tuition—a 20.3 percent increase. The need for funds may also result in further layoffs, course reductions and hiring freezes, as stated by the UC Newsroom. The state budget would have insufficient funds to proceed with a tuition buyout and therefore, lead to an additional shortfall of $15.4 million for the 2013-2014 academic year.
“Governor Brown’s 2012-13 budget package, in tandem with his revenue initiative, contains an implicit deal for UC. It is an imperfect deal, and it is not without risks,” President Mark Yudof said. “Still, it is a better deal than we anticipated. And it is our best shot at taking an important step toward the financial stability that this university so desperately needs.”
Sporting zombie attire and assorted cosmetics, student protesters rallied to the regents meeting with demands against tuition hikes, privatization of higher education and neglect of adequate state funding. At one point, the “debt zombies” stood atop furniture and performed Michael Jackson’s “Thriller,” according to the Daily Californian. After the police declared an “unlawful assembly,” protesters were soon escorted out.
The Schools and Local Public Safety Protection Act of 2012, also known as Prop 30, would temporarily raise the California sales tax by one-quarter of a cent for four years and apply higher income taxes on those who make $250,000 or higher for seven years. Passage of Prop 30 translates to an estimated $8.5 billion of additional revenue for the state, as indicated by the California Legislative Analyst’s Office, and halts $6 billion trigger cuts to education.
The UC system experienced a decrease in state funding totaling $900 million since the recession began in 2008. “Over that same period, UC’s costs have risen by $1.22 billion,” stated Nathan Brostrom, executive vice president for business operation. “[The university] has relied on tuition and fee increases to cover a third of the budget gap. The other two thirds have come from administrative efficiencies and cuts to academic programs.”
“As costs continue to rise, UC’s budget shortfall in five years could grow to as much as $2.9 billion if revenues remain at current levels,” stated Brostrom, who elaborated that these projections have already take into account predicted efforts to cut costs by $1.5 billion. Back in May, dialogue began between the regents and the state legislature about a multi-year funding plan, which would construct a more predictable and consistent flow of state funding to the UC system. Continuing progress will ultimately depend on the results in November.
The Board of Regents endorsed Governor Brown’s tax initiative on the grounds that it would stabilize state funding for the UC system in the 2012-2013 academic year. Fiscal uncertainty has led the regents to brainstorm possible changes to campus policy and alternative cost-saving methods in attempts to raise revenue. Last year, the UC system saved $157 million through the “Working Smart Initiative,” which consolidates business practices, restructures administrative tasks and supports academic efficiency.
At their most recent meeting, held Sept. 17-19, the regents discussed possible courses for greater fiscal solvency, which included but are not limited to: a 3 percent increase in parking, raising the cap on out-of-state enrollment from 10 to 20 percent, increasing night classes to expedite graduation and adjusting tuition to the autonomy of each campus. Another possibility includes accepting outside donations to fund a percentage of financial aid obligations. Through the current return-to-aid policy, one-third of all students’ tuition and fees are dedicated to financial aid, which equates to $700 million from tuition, according to the UC Committee on Finance.
The next UC Board of Regents meeting is scheduled for Nov 13-15 at the UCSF Mission Bay.